Blockchain explained from an enterprise perspective

What is blockchain technology?

The simplest blockchain definition? A reliable, difficult-to-hack record of transactions – and of who owns what. Blockchain is based on distributed ledger technology, which securely records information across a peer-to-peer network. Although it was originally created for trading Bitcoin, blockchain’s potential reaches far beyond cryptocurrency. Blockchain ledgers can include land titles, loans, identities, logistics manifests – almost anything of value. The technology is still new, but the potential impact it can have on business is exciting, and immense.

What is distributed ledger technology?

A distributed ledger is a database of transactions that is shared and synchronised across multiple computers and locations – without centralised control. Each party owns an identical copy of the record, which is automatically updated as soon as any additions are made.

How does blockchain work?

A blockchain records data across a peer-to-peer network. Every participant can see the data and verify or reject it using consensus algorithms. Approved data is entered into the ledger as a collection of “blocks” and stored in a chronological “chain” that cannot be altered.

What are smart contracts?

Smart contracts – self-executing agreements based on blockchain technology – automatically trigger actions or payments once conditions are met. In the near future, they will use real-time information, such as asset GPS data, to trigger an event, such as a transfer of ownership and funds.

4 types of blockchain networks

Of the four ways to establish a blockchain network – currently, consortium is the most accepted model for business.

Consortium blockchains

In a consortium blockchain, the consensus process is controlled by a pre-selected group – a group of corporations, for example. The right to read the blockchain and submit transactions to it may be public or restricted to participants. Consortium blockchains are considered to be “permissioned blockchains” and are best suited for use in business.

Semi-private blockchains

Semi-private blockchains are run by a single company that grants access to any user who satisfies pre-established criteria. Although not truly decentralised, this type of permissioned blockchain is appealing for business-to-business use cases and government applications.

Private blockchains

Private blockchains are controlled by a single organisation that determines who can read it, submit transactions to it, and participate in the consensus process. Since they are 100% centralised, private blockchains are useful as sandbox environments, but not for actual production.

Public blockchains

Anyone can read a public blockchain, send transactions to it, or participate in the consensus process. They are considered to be “permissionless.” Every transaction is public, and users can remain anonymous. Bitcoin and Ethereum are prominent examples of public blockchains.

The age of blockchain transactions

The proliferation of smart devices is creating more digital transactions from more sources, and traditional transaction processing systems can’t keep up. Find out why many analysts believe blockchain ledgers are the answer.

Supply Chain

Blockchain technology has the potential to improve transparency and accountability across the supply chain. Applications are already being used to track and trace materials back to the source, prove authenticity and origin, get ahead of recalls, and accelerate the flow of goods.

Public Sector

The public sector is looking at the potential of blockchain to serve as the official registry for government and citizen-owned assets like buildings, houses, vehicles, and patents. Blockchains could also facilitate voting, reduce fraud, and improve back-office functions like purchasing.

How SAP is bringing blockchain to the enterprise

At SAP, we see blockchain as a promising way to simplify complex multi-party processes and create trust among participants. We’re using our expertise in 25 industries and across all lines of business to actively explore blockchain technology, and help you capitalise on its potential. SAP Leonardo, our digital innovation system, includes some early-stage blockchain capabilities, and integrates them with other breakthrough technologies – such as the IoT and machine learning.

SAP Cloud Platform Blockchain service

SAP Cloud Platform Blockchain service

SAP Cloud Platform Blockchain service

SAP Cloud Platform Blockchain service

SAP Cloud Platform Blockchain service

SAP Cloud Platform Blockchain service

SAP Cloud Platform Blockchain service

Embedded in the SAP Cloud Platform, our blockchain-as-a-service (BaaS) pilot is giving registered customers an easy way to experiment with the technology. By eliminating the need for a large upfront capital investment, BaaS is perhaps the lowest-risk gateway to enterprise blockchain adoption.

Experiment with blockchain to see how it could benefit your business

Use open standards to create consortium and private blockchain networks

Getting started with blockchain technology

Register for the early access beta program

See firsthand how your business can benefit from blockchain and distributed ledger technology by joining SAP’s early access beta program. We’re actively looking for innovative companies to work with – but hurry, space is limited.